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Even if you only know the basics of Bitcoin, you’ve probably heard the word “decentralized”. This means that digital currency is not tied to a central authority, so it is not subject to a single possible failure. But if you’ve been following the headlines on Bitcoin, you know that the currency’s success can depend on a man tweeting breaking memes.
Last week, the Wall Street Journal reported that the Securities and Exchange Commission told Tesla it had failed to vet its CEO’s tweets, as required by a 2018 securities fraud regulation. Elon Musk is supposed to be spreading tweets that could affect stock prices or the market through Tesla’s communications team, but it doesn’t work very well.
Shortly after the Journal article was published, Musk copied and pasted a breaking meme, added the hashtag #Bitcoin and a Bitcoin emoji followed by a broken heart emoji. This move caused the value of cryptocurrency to plummet and led to the ether and dogecoin of digital currencies.
Tweeter
Cryptocurrency traders love memes, but they live by the sword, die by the sword for them, especially when it comes to Musk. When Musk hosted Saturday Night Live a month ago, he joked that dogecoin – a cryptocurrency inspired by the memes he regularly touted – being “a fuss” and the value plunged nearly 30%. A week later, he gave virtual currency a boost by tweeting that he was working with developers to improve the efficiency of his transactions.
In January, Musk added #bitcoin to his Twitter bio, which was enough to increase the cryptocurrency by 20% (it has since been deleted). Days later, Tesla bought $ 1.5 billion worth of bitcoin and said it would accept the currency as a form of payment for vehicles, sending the price to an all-time high. Three months later, Musk tweeted that Tesla would no longer accept Bitcoin, citing the environmental effects of cryptomining, causing its value to drop by 10%.
These ups and downs angered hacktivist group Anonymous, which posted a video accusing Musk of trolling the cryptocurrency markets.
Aside from all that can be said about the hagiography around Musk and the influence that goes with it, the impact of his words (and sometimes emoji) on cryptocurrency served to expose the one of its weaknesses. Those who have enough power in the market can manipulate it.
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Self-proclaimed “crypto analyst” Mr. Whale responded on Twitter to Musk’s breakup tweet with: “Bitcoins claim it’s [sic] literally impossible to manipulate the price of Bitcoin … while simultaneously shouting that Elon Musk is manipulating the price of #Bitcoin is a peak of hypocrisy. Musk himself responded with a finger emoji pointing at the tweet.
This is not a shocking economic reality when it comes to other markets, but for a form of money that is touted as the answer to those who wish to relinquish government control over money, it is devastating. . The complexity of buying and using cryptocurrency puts it beyond the reach of the average consumer. Bitcoin and its brethren reside primarily in the digital wallets of technocracy. When those who hold the currencies bow to Musk’s whims, it makes him a leader and the cryptocurrency a kind of fiat.
Cryptocurrency investors may blame Musk’s manipulations, but the market is volatile and the majority of those involved in it expect big swings. They know Musk is unlikely to affect their money in the long run. But his antics have added value to the arguments of those who say the cryptocurrency’s claims are bogus.
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